The Incredibly Shrinking Worldwide PC Industry

The days of PC growth are gone. Solution providers need to adapt their business accordingly if they haven’t already.

... And the PC free fall continues. No solution provider I have spoken with over the past two years relies on PC sales anymore as part of its business strategy, but I am sure they are out there. And for those of you that are still hitching your horse to that wagon, I don’t know what it will take to get you into the 21st century.

Specifically, Gartner said worldwide PC shipments dropped to 76 million units in the second quarter of 2013, a 10.9 percent decrease from the same period last year. What’s worse, this actually is the fifth consecutive quarter of declined PC shipments, marking the longest duration of decline in the PC market’s history.

And I have news for you, folks. It hasn’t bottomed out yet. Not even close. There is no silver lining in this latest Gartner report if you’re still relying on PC sales. According to the report, all regions showed a decline compared to a year ago. The fall in the Asia/Pacific PC market has now shown five consecutive quarters of declining shipments, while the EMEA PC market has registered two consecutive quarters of double-digit decline.

“We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets,” said Mikako Kitagawa, principal analyst at Gartner, in a prepared statement. “In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market.”

No vendor was left unscathed with second tier makers experiencing double digit declines. Among the top three worldwide, Lenovo edged out HP (HPQ) with 16.7 percent of share but still recorded a 0.6 percent decline. HP came in at 16.3 percent share but experienced a 4.8 percent drop in the second quarter when compared with the second quarter of 2012, according to Garner. Dell (DELL) rounded out the top three with 11.8 percent of market share but still saw its shipments drop 3.9 percent worldwide, according to Gartner.

While many industry pundits have been blaming Microsoft (MSFT) Windows 8 for the decline in PC sales, Gartner doesn’t buy into that line of thinking and neither do I. PC shipments are declining because the PC has become a dinosaur. More applications are being developed for mobile devices and tablets compared to PCs, at an extremely disproportionate rate and this industry you need to follow the development money. It’s always been that way.

In the United States, the PC shipment story isn’t as terrible but the growth isn’t there, and nor will it ever will be again. U.S. PC shipments dropped to 14.9 million for the second quarter of 2013, down 1.4 percent from 15.2 million in the year-ago quarter. Lenovo experienced a 19.7 percent growth and Dell saw its PC shipments grow 6.4 percent, but that wasn’t enough to make up for all the other vendor declines, according to Gartner.

The writing is on the wall. The days of PC growth are gone. Adapt your business accordingly if you haven’t already.